Post office saving schemes in India

One of the safe and assured ways of getting fixed income is investing in post office saving schemes in India. In this article we would discuss about post office saving schemes in India and their features.

Post office saving schemes in India

Small saving schemes of Indian post office (backed by Govt. of India) has always been popular as they provide assured returns and capital is protected. Below are the post office schemes in India along with latest interest rates.

1) Public Provident fund:

Investment up to Rs 1,00,000 per annum qualifies for IT Rebate under section 80 C of IT Act.

Interest offered is 8.70% per annum. Interest rate would be decided by Govt. of India every year.

Loan facility available from 3rd financial year up to 5th financial year. The rate of interest charged on loan shall be 2% p.a.

Withdrawal permitted from 6th financial year.

Non-Resident Indians (NRIs) are not eligible.

An individual cannot invest on behalf of HUF (Hindu Undivided Family) or Association of persons.

3) National Saving certificate: NSC’s are generally used for tax saving purpose and to get regular fixed income.

No maximum limit for investment.

No TDS, however income is taxable at maturity.

Premature withdrawal not available. However can be kept with banks as collateral security for loans

Investment up to INR 1,00,000/- per annum qualifies for IT Rebate under section 80C of IT act.

Available in 5 years and 10 years options. Rate of interest 8.50% p.a. and 8.80% p.a. respectively.

4) 5 year senior citizens saving schemes

Good and safe investment option for senior citizens.

The account may be opened by an individual, who has attained age of 60 years or above on the date of opening of the account.

Who has attained the age 55 years or more but less than 60 years and has retired under a Voluntary Retirement Scheme or a Special Voluntary Retirement Scheme on the date of opening of the account within three months from the date of retirement.

No age limit for the retired personnel of Defense services provided they fulfill other specified conditions.

The account may be opened in individual capacity or jointly with spouse.

NRIs and HUF are not eligible to open an account.

Maximum limit of Rs 15 lakhs

Premature withdrawal is available before three years with reduction in interest rates.

Premature closure allowed after three years without any deduction.

In case of death of the depositor before maturity, the account shall be closed and deposit refunded without any deduction along with interest.

Interest @ 9.20% per annum from the date of deposit on quarterly basis.

Nomination facility is available in the Scheme.

Investment under this qualifies for 80C IT benefits.

5) Time deposits:

Any individual (a single adult or two adults jointly) can open an account.

Time deposit available for 1 Year, 2 Year, 3 Year and 5 Year

In case of premature closure from 6 months to 1 year of deposit, simple interest would be paid. Beyond one year, interest would be paid at one percent less than the term deposit interest rates.

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Suresh KP i.e. me, have written 1250+ articles on this Blog. I love doing analysis on various Best Investment Plans like mutual funds, Stocks, IPO’s, NCD Bonds, Insurance products. If you like our blog, you can share some of the good articles on your Facebook or Twitter. This would be the BIGGEST gift which you would be giving to us.